2013 J.P.Morgan Healthcare Conference, San Francisco, CA – Overview

2013 J. P. Morgan Healthcare Conference Overview– San Francisco, CA

(more details to be shared in next posts)

Whew!! The J. P. Morgan conference and all other related events are finally over. This conference is the largest and most important event of the year, for the health care sector. It brings together global industry leaders, investors, business analysts, emerging fast-growth companies, technology innovators, and other professionals in the industry. Despite 2012 year ending on a rather dismal note, improvement in the economic indicators point to a greater stability and the optimism at the conference was palpable. 2012 was a challenging year with weak domestic economy, ongoing financial challenges in Europe, contentious uncertainty of the long looming “fiscal cliff”, the big pharma dealing with patent expirations, and greater uncertainty in FDA regulations. Fundraising in 2012 lagged behind the pace in 2011. According to Bioworld Insight analysis, in 2012, approximately $14.3 billion was raised by biopharmaceutical public companies, compared with $18.9 billion, in the previous year. Public offerings accounted for $8.5 billion of this total figure, down from $10.2 billion in 2011. However, things seem to have greatly stabilized on many levels, towards the end of 2012. Market is showing signs of steady job growth, there is increasing stability in the financial markets, the fiscal cliff appears to be inching closer to complete resolution, and the big pharma has gone through restructuring and cost reduction to deal with the patent expirations and have promising pipelines that portend a sound and steady growth. In the next post, I will summarize some specific highlights from public and private company presentations.

In his opening remarks, Doug Braunstein, Chief Financial Officer for the firm, looked back at the first conference. Back in 1983, it featured 21 presenting companies, when US spent about $350 billion on healthcare. At the 2013 conference, a record 397 public and private companies presented and was attended by over 8,600 registered attendees that included over 4,000 investors. Braunstein observed that the U.S. expenditures in healthcare have increased “eight fold” to more than $2.8 trillion, which is also a driver for biotech companies to come up with technologies that are value differentiating.

For a dedicated democrat like me, politically speaking, JPM keynote presentations can be lonely affairs. But aside from the politics, the lunch time keynote presentations were made by influential figures and they did not disappoint. They included, Mr. Bob Woodward, Legendary Pulitzer Prize-Winning Journalist/Author and Associate Editor of The Washington Post, and Dr. William Frist, Surgeon and former U.S. Senate Leader, during the first two consecutive days. Quoting Sir William Osler, Frist observed, “variability is the law of life”, and emphasized the need for personalized medicine to help improve efficiency and lower healthcare costs. Frist demonstrated how the convergence of new technology with personalized medicine can help achieve dramatic results. While genome sequencing was very slow and expensive, now the cost is low enough, for it to be in common person’s reach and the process is much speedier. Big data however is a significant barrier, since we don’t yet know how to put the data to good use. Frist also wowed the audience with a dramatic demonstration of getting an instantaneous ECG recording of himself with Alive Cor iPhone app.

The palpable optimism and activity at J.P. Morgan Healthcare Conference, at the Westin, in San Francisco, resonated outward to dozens of other hotels, restaurants, bars and outdoor venues where meetings, lunches, and evening receptions, further facilitated deals between analysts, executives and other professionals. Concurrently occurring, the Biotech Showcase, an investor and partnering conference, devoted to providing private and small- and mid-cap biotechnology companies an opportunity to present to and meet with investors and biopharmaceutical executives, had attracted investors and biopharmaceutical executives from around the world. Also, simultaneously occurring OneMedForum, at Sir Francis Drake Hotel, attracted leading investors and management of some of the most promising emerging life science companies, with a slightly greater focus on medical devices. In one of the next few posts, I will discuss OneMedForum event, in greater detail.

Dedicated, passionate professionals in the healthcare sector know that for good health, playing is as important as working. The evening cocktail receptions sponsored by various law firms, banks, and other public and private companies, provided a much-needed respite from the breakneck pace of the J.P. Morgan Healthcare Conference and other events. There were anywhere between 50 and 60 evening receptions during the 3 days, taking place in various hotel penthouses and lobbies, art galleries, and stores like Saks Fifth Avenue. The receptions featured gifts, delicious finger foods served by waiters and waitresses, rare wine and expensive scotch at some events, and of course ongoing opportunity for deal making, well past into the mid-night.

In the next few posts, I will write about highlights from specific company presentations and also highlights from OneMedForum conference.

Terry Corbin & Pauline Farmer-Koppenol discussed patent law implications after the Prometheus ruling

Terry Corbin (partner with Fenwich & West with extensive experience in strategic IP counseling and patent litigation for technology and life science companies) and Pauline Farmer-Koppenol’s (focusing on serving technology and life sciences clients in prosecuting patent applications) discussed the impact of recent U.S. Supreme Court’s Prometheus Decision on Patent Eligibility in areas of Personalized Medicine, Molecular Diagnostics and Human Gene Patents at www.bio2devicegroup.org .

 

Corbin gave the background information on the U.S. Supreme Court decision issued on March 20, 2012 that was centered around section 101 of the patent law, that remains more or less unchanged from 1793.  This section requires that the patentee have invented or discovered something new and useful or a new and useful improvement on something that exists.  Through various court decisions, this section of the law has also been interpreted to mean that laws of nature are not patentable.  Mayo Clinic Lab and Prometheus had a court battle involving an assay for determining metabolite levels of thiopurine drugs.  These are used to treat people with intestinal tract autoimmune disease.  The assay in question revolved around a metabolite test which mimics naturally-occurring nucleosides, the subunits making up DNA or RNA – genetic material.  Prometheus Lab is the exclusive licensee of the patents that protect a method for determining the proper dose of the drugs by measuring the levels of the particular metabolite.  Mayo Clinic began using and selling its own test asserting that the Prometheus patents were around unpatentable matter and were therefore, invalid.  In a unanimous decision, the Supreme Court agreed with Mayo and found that the patents claimed a law of nature and were therefore ineligible for patent protection.  The court disregarded the numerous “Friends of the Court” briefs filed in favor of Prometheus, in making this ruling.

 

In the opinion of Corbin and Farmer-Koppenol, there could be many implications of this ruling that could potentially negatively impact innovation in the biotech industry.  A looming additional concern is that the ruling was not accompanied with much guidance for future litigation in this area, thereby putting a much greater burden on the lower courts.  The exclusivity versus innovation debate has always been at the center of the patent debate.  In this case, Prometheus highlighted a drafting problem.  In moving ahead, Corbin and Farmer-Koppenol advised, not to be greedy and not to try to grab more than what is truly invented.  Farmer-Koppenol also asserted that device is a gold standard but medical device patents should seek to emphasize what they are structurally, and not just what they are capable of doing.  In light of this ruling the speakers also advised to re-examine and amend claims, when necessary.  The talk was followed by enthusiastic Q&A session with participants eager to discuss its many implications.